Correlation Between North American and Expro Group
Can any of the company-specific risk be diversified away by investing in both North American and Expro Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining North American and Expro Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between North American Construction and Expro Group Holdings, you can compare the effects of market volatilities on North American and Expro Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in North American with a short position of Expro Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of North American and Expro Group.
Diversification Opportunities for North American and Expro Group
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between North and Expro is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding North American Construction and Expro Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Expro Group Holdings and North American is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on North American Construction are associated (or correlated) with Expro Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Expro Group Holdings has no effect on the direction of North American i.e., North American and Expro Group go up and down completely randomly.
Pair Corralation between North American and Expro Group
Considering the 90-day investment horizon North American Construction is expected to generate 0.97 times more return on investment than Expro Group. However, North American Construction is 1.03 times less risky than Expro Group. It trades about 0.25 of its potential returns per unit of risk. Expro Group Holdings is currently generating about 0.08 per unit of risk. If you would invest 1,701 in North American Construction on August 28, 2024 and sell it today you would earn a total of 303.00 from holding North American Construction or generate 17.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
North American Construction vs. Expro Group Holdings
Performance |
| Timeline |
| North American Const |
| Expro Group Holdings |
North American and Expro Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with North American and Expro Group
The main advantage of trading using opposite North American and Expro Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if North American position performs unexpectedly, Expro Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Expro Group will offset losses from the drop in Expro Group's long position.| North American vs. Geospace Technologies | North American vs. MRC Global | North American vs. Natural Gas Services | North American vs. Now Inc |
| Expro Group vs. Natural Gas Services | Expro Group vs. Archrock | Expro Group vs. Geospace Technologies | Expro Group vs. Newpark Resources |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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